Logitech could dump video-conference arm in revamp

ZURICH (Reuters) - Logitech’s chief executive said his company will decide within 90 days whether to sell the video-conferencing arm it bought in 2009 for $405 million after this week writing down the unit’s value by more than half.

The LifeSize video conferencing unit has failed to shake up a market dominated by Cisco and Polycom and where Chinese giants Huawei and ZTE are making inroads, while global revenues in the segment have slid as economic uncertainty persists.

Any of the above four companies could be potential buyers for a small niche player in the $3 billion a year market, analysts said.

“This is such a tough market, and that’s the biggest driver of the impairment,” Logitech’s newly anointed CEO Bracken Darrell told Reuters in a telephone interview.

“It’s not an easy decision. Is this an asset that makes more sense for us to own or for someone else to own?” Darrell said, adding that the unit was well positioned for success among small and medium sized businesses.

The company also wants to sell its remote controls and digital video security businesses, and to develop more products for smartphones, touch-screen tablets, and for computer gamers.

“It’s important to note we’re going to shrink the company first and make it more profitable, and then focus on areas where we think we can grow,” said Darrell after the company reported lower year-on-year sales for the fifth consecutive quarter.

“PC gaming is an area we haven’t grown in because we didn’t launch any new products, but we’re going to do that now. Mice, keyboards, headsets,” said Darrell, a former executive at household appliance maker Whirlpool.

Founded in a farmhouse near the small Swiss town of Romanel-sur-Morges in 1981, Logitech became a rising technology star when it marketed the first modern computer mouse, developed at the nearby Swiss Federal Institute of Technology in Lausanne.

Since then the Swiss-American company has shipped more than a billion mice and introduced a successful line-up of PC accessories including keyboards, cameras and speakers.

After peaking in 2007, Logitech shares have fallen more than 80 percent as the relentless rise of touch-screen tablets and smartphones packed with accessories gnawed away at sales of the mice and other plug-in peripherals Logitech had nurtured.

Darrell rejected the idea that add-on products were unlikely to attract users who increasingly want peripherals such as cameras built in to their smartphones and tablets, and said Logitech’s ‘mobile boombox’ wireless speakers are now one of its top sellers, along with its iPad cover.

“We relaunched a keyboard cover, we call it the other half of the iPad, it’s now our top selling product,” Darrell said. “What we do seems to fit in this mobile space when we get it right.”